Ever the schoolyard bully, the EPA has been pushing its agenda against the will of the states, at least until the principal intervenes.

A minority (that’s the Republicans) report by the U. S. Senate Committee on the Environment & Public Works asserts that the EPA is in violation of “cooperative federalism”, in which the EPA would set national standards on an emissions rule and allow states to administer the regulation in the most cost effective way. The rationale is that states and localities are better suited than the feds to design and implement compliance strategies.

The report says the agency has failed to consult with states or has coerced states to adapt stringent regulation that come at a huge cost to the state’s citizens and economy.

The report focuses on “sue and settle” agreements the EPA makes with environmental activist organizations in which the agency, after being sued by an environmental group, enters into a consent decree allowing regulations to move forward without comment from the states or regulated industries.

The bully doesn’t always get its way.

Alt v. EPA was about the EPA’s assertion of regulatory authority over stormwater runoff from Ms. Alt’s farmyard. She challenged the EPA’s findings that she had violated the Clean Water Act. The case was about the discharge of “particles, dust and feathers” from Ms. Alts’ poultry farm into a federal waterway. Inother words, when it rained, chicken poo-poo ran into “Mudlick Run”.

The EPA found that Ms. Alt was in violation of the Clean Water Act and threatened a civil action in which she could be subject to penalties of up to $37,500 per day. The question was whether Ms Alt’s activity was exempt from liability under the agricultural storm water exception to the definition of a “point source”.

I’ll skip the legal analysis and get to the larger point: According to the court,“it appears to be a central assumption of the EPA’s position that the agricultural stormwater discharge exemption had no meaning whatsoever from the time the exemption was added to the statute until 1987 until the EPA promulgated its new regulations in 2003.”

In rejecting the EPA and ruling for Ms. Alt, the court concluded that “common sense it the most fundamental guide to statutory construction.”

In Iowa League of Cities. v. EPA, the federal 8th Circuit ruled that the agency was pushing a new interpretation of its wastewater treatment rules in letters sent to cities in Iowa in order to prohibit selected internal techniques for treating wastewater during high-flow storm events.

If you would rather not read the opnion, I refer you to the NCPA’s Energy and Environment  newaletter by Sterling Burnett, from which I plagiarize joyfully. The ruling says that what goes on within the plant is not within the EPA’s purview as long as the effluents leaving the plant meet pollution limits. If the EPA wants to regulate an activity, it must go through the rule making process, not simply give opinions. The EPA can’t contradict its own rules.

Makes sense to me.

“It is better to stop a bad law than pass a good one.” Calvin Coolidge.

Is anybody in Washington listening to Silent Cal? 

What can the energy industry (oil and gas in particular) expect from the Administration in its second term?  Let’s gaze into the crystal ball:

Carbon Tax

The National Center for Policy Analysis predicts a carbon tax. In what is really a position statement on the perils of such a tax, Sterling Burnett acknowledges that there are some benefits that are a preferable to cap and trade. A carbon tax is transparent and that it would be clear to everyone that it is money paid directly to the government, whereas a cap and trade scheme would not.

He concludes that a carbon tax is a bad idea because “there is never a good time for a bad tax.” (There is a position we can believe in) In the sense that a tax on something as important as energy which he called the “foundation of modern society” would affect everyone in virtually every activity they undertake. Further, he considers carbon taxes to be highly regressive and hence a disportionate burden on the poor.

The good news, if it can be believed, is that President Obama says he would never propose such a tax.

NGL Exports

The Wall Street Journal reports that as the Department of Energy reviews the pros and cons of exporting US natural gas, large chemical companies who burn lots of natural gas oppose exporting energy. This would, of course, keep natural gas cheap.  Oil and gas producers argue that exports are positive for the economy, good for the balance of trade, and have other benefits.

Chemical companies are building new plants in the US to capitalize on our cheap energy which in itself is a job creator. They say no one knows what demand may eventually be and exports may hinder economic growth in that way.

Daniel Yergin for one, believes that there are shale fields yet to be tapped and those concludes that exports would be a good thing. The Wall Street Journal says let the market decide.

Keystone Pipeline

The Natural Resources Defense Council thinks the Keystone XL pipeline is a bad idea, arguing that the pipeline would kill more jobs than it creates by reducing investment in “the clean energy economy” and that the pipeline would transport dirty, low high sulfur tar sands oil, which itself uses large amounts of energy and water to produce and clean up. In short, they believe we need to do everything we can to avoid importing tar sands oil to the United States (The link to the NRDC offers more reports and analysis from theri point of view if you are interested, just so you know).

Business Insider believes that the pipeline will be approved, with a few tweaks in the route to avoid environmentally sensitive areas.

The Role of Fossil Fuels in the Obama Energy Policy

From Platts: Jack Gerard, president of the American Petroleum Institute professes to be encouraged that about President Obama’s commitment to oil and gas development in campaign statements leading up to the election.  Huh?

According to Inside Climate News, the congressional lineup has changed with the defeat of several congressmen characterized by this group as opposed to clean energy. This is an indicator of continued pressure to be placed on the president to favor alternative energy sources. (Notice how the Heritage Foundation is “Right Wing” while the environmental groups are not “left wing”).

Taxes

According to Reuters the IPAA and others expect a rough four years, from potential elimination of the intangible drilling cost deduction to increased regulation of carbon dioxide emissions, which will affect coal and oil and gas producers. And they don’t mention potential regulations on fracking, which is on the agenda.

Looking to 2016

I conclude with an exclusive look at the early front-runner for the 2016 Republican nomination .

Regardless of your point of view, here is some wise musical advice.

For the purposes of this conversation let’s agree that global warming exists, and let’s not argue about whether it is, as those who use big words say, “anthropomorphic”  “anthropogenic” or, as you and I might say, “man made”.

Bjorn Lomborg doesn’t focus so much on the causes of rising sea levels; he proposes alternative ways to address the effects. In his latest Newsletter he explains why he disagrees with the conventional reactions to the devastation caused by Hurricane Sandy and advises what should be done to avoid future catastrophes.

His points are, among others:

  • The goal of reducing carbon emissions is far too costly for future generations to afford and won’t make a timely difference anyway. The benefits don’t justify the costs.
  • Because of those costs and the delayed effect it is, in his words, “morally irresponsible” to go about protecting coastlines by CO2 reductions. 
  • Carbon cuts won’t be effective for 50 to 100 years, during which time there will be much human suffering that could be avoided.
  • There are better, more practical, and quicker acting ways to address rising sea levels that attempting to reduce CO2 levels.
  • Prominent “environmental experts” such as Robert Redford and New York Mayor Michael Bloomberg attract lots of attention but have it wrong.

Those who doubt Mr. Lomborg’s position will find comfort in several comments posted with the newsletter. 

A blog from Wendell Cox for the National Center for Policy Analysis on California’s Global Warming Solutions Act is an example of what Mr. Lonborg is worried about. The report questions whether cap and trade is a cost-effective way to reduce carbon emissions.   

An appropriate musical interlude ?